EU

Institutions

History and Objectives of Competition Law

Internal Market One of the activities of the Community: “an internal market characterised by the abolition, as between member States, of obstacles to the free movement of goods, persons, services and capital” (Art. 3(1)(c)) “The internal market shall comprise an area without internal frontiers…” (Art. 14(2))

How to achieve these goals Prevent agreements restrictive of competition –Vertical (Different level of the distribution chain) –Horizontal (Among competitors) Control market power and its abuse; control oligopolistic markets Prevent mergers that lead to concentration in market power Control direct or indirect aid given by Member States to undertakings

How does this appear in EU law Antitrust (Articles and 86 EC Treaty) –Control of collusion and other anticompetitive behaviors (agreements in restraint of trade – abusive behaviors of dominant undertakings) Mergers (Regulation No. 4064/1989, replaced by No. 139/2004/EC) –Control of mergers, joint ventures, acquisitions State Aid (Article EC Treaty) –Control of direct or indirect aid given by Member States to undertakings

Sources of EC Law

Sources Primary law: Treaties General principles of law International Agreements General international law Secondary law: (Arts. 110; 249 and ) Regulations Directives Decisions Soft law

EC Treaty as the EC Constitution “A new legal order that confers rights and obligations on individuals” Van Gend en Loos (Case 26/62) 1963

The Supremacy of EC Law over conflicting national law “Member States have limited their sovereign rights, albeit within limited fields, and have thus created a body of law which binds both their nationals and themselves” Costa v. ENEL (Case 6/64) 1964

Direct effect (of a provision) Directly effective provisions grant rights that “natural and legal persons” can enforce in national courts

Direct Effect Vertical: against a Member State (e.g. Van Gend and Loos, 1963) Horizontal: against other individuals (Defrenne II, 1976)

Secondary law Arts. 110; 249 and ECT Regulations Directives Decisions

Common Provisions (Articles ) Shall state the reasons on which they are based Shall refer to proposals or opinions required to be obtained Enter into force on the date specified in them or, in the absence thereof: Legal basis (art. 5(1)); conformity with the principles of subsidiarity and proportionality (art. 5 (2) and (3)) E.g. Commission’s proposal; EP’s opinion On the 20th day following their publication in the Official Journal of the European Union or upon notification

Regulation (Art. 249(2)) General application Binding in its entirety Directly applicable in all member States Entry into force subject to publication

Directive (Art. 249(3)) Addressed to member States Binding as to the result to be achieved, but leaves to the national authorities the choice of form and methods Entry into force subject to publication (rule)

Decision (Art. 249(4)) Addressed to member States or “natural and legal persons” Binding in its entirety Entry into force upon notification (rule)

Constitutional Principles Supremacy Direct applicability / Direct effect Disapplication of incompatible national law Interpretation in conformity with EC law State responsability for damages caused by failure to comply with a EC obligation

Action for damages against member States Remedy applicable to the breach of all types of Community law

Soft law “Pre law” “Post law” “Para law” Green / White papers, Memorandum Notices, Guidelines, Communications Reccomendations,Opinions Conclusions, Resolutions, Declarations,

Sources of EU Competition Law EC Treaty Articles (81-89) Regulations –Council –Commission Commission decisions Judgments –European Court of Justice –Court of First Instance Commission notices and guidelines Commission Annual reports National level playing field!

Effect on trade between Member States Articles 81 and 82 of the EC Treaty are only applicable if there may be an appreciable, direct or indirect, actual or potential influence on the flow or pattern of trade between at least two Member States of the EU See Art. 3 of Regulation No. 1/2003

Cont.d The same principle applies in relation to the prohibition of State aid The same principle defines the scope of mergers regulations

State Aid Art. 87, par. 1, declares incompatible with the common market “any aid granted by a Member State … in so far as it affects trade between Member States”

Mergers Regulation No. 139/2004 only applies in relation to mergers with a EU dimension Thresholds: Art. 1(2) “The combined aggregate worldwide turnover is more than 5 billion and the aggregate Community-wide turnover is more than 250 million, unless each of the undertakings achieve more than 2/3 of its aggregate Community-wide turnover within one and the same Member State”

Law 10 October 1990 No. 287 Art. 1 Ambito di applicazione e rapporti con l'ordinamento comunitario 1.Le disposizioni della presente legge in attuazione dell'articolo 41 della Costituzione a tutela e garanzia del diritto di iniziativa economica, si applicano alle intese, agli abusi di posizione dominante e alle concentrazioni di imprese che non ricadono nell'ambito di applicazione degli articoli 65 e/o 66 del Trattato istitutivo della Comunità europea del carbone e dell'acciaio, degli articoli 85 e/o 86 del Trattato istitutivo della Comunità economica europea (CEE), dei regolamenti della CEE o di atti comunitari con efficacia normativa equiparata. 4. L'interpretazione delle norme contenute nel presente titolo è effettuata in base ai principi dell'ordinamento delle Comunità europee in materia di disciplina della concorrenza.

Italian NCA Autorità garante della concorrenza e del mercato Law 10 October 1990 No. 287 (as amended by Law 6 February 1996 No. 52, art. 54(5))

Art. 81 Anticompetitive Agreements “1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which: (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical development, or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contract 2. Any agreements or decisions prohibited pursuant to this article shall be automatically void. 3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of: — any agreement or category of agreements between undertakings, — any decision or category of decisions by associations of undertakings, — any concerted practice or category of concerted practices, which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.”

Cont.d Art. 81 (1): general prohibition (not absolute) -Collusion -Effect on trade between members States -Restriction of competition Art. 81 (2): consequences of a violation -Nullity -Pecuniary sanctions -Reparation of damages Art. 81 (3): exemptions